The EURUSD traded nearly flat at the end of the week as market volumes were well below average due to the US Independence Day celebrations. Friday’s move capped a week of small gains in the Euro against the USD, up 0.24 per cent over the 5 days.

With most major banks closed for the holiday, markets had the time to digest the US Non-Farm Payrolls and initial claims reports. Traders are also paying close attention to the covid-19 infectivity headlines which has been weighing on market sentiment.

Unemployment figures released by the US and the EU are showing signs of improvement over the previous month, though traders should note that these figures are backward looking and likely do not reflect the impacts of the recent uptick covid-19 cases.

Although the EU economy remains vulnerable, the European Central Bank’s Klass Knot said on Friday that in light of the recent data collected, the fears of a deeper than expected recession versus their baseline scenario is diminishing, lifting the prospects of the Euro in the short run.

From a technical perspective, the EURUSD looks to be on the verge of a significant breakout as indecision continues to split traders into balanced camps. Traders on either side are likely looking for any shift in market sentiment before making any large bets. Monday’s US manufacturing data may provide the jolt needed as the American market reopens after the long weekend.

The minor trend is up with momentum slightly favouring the bulls in the past week. The expected range in the coming sessions will be between the 1.14 mark and the 1.11423 support level. Buyers may look to enter conservative long positions and target the 0.236 Fibonacci retracement level at 1.12680.

On the downside, depending on whether sellers have enough momentum to cross below the short-term moving average in red, the 1.11423 support level will likely be the bearish target this week should US and Eurozone economic data fail to impress.

Support & Resistance Levels:

R3 1.14356
R2 1.13534
R1 1.13000
S1 1.11852
S2 1.11423
S3 1.11000

Analyzed by: Mr. Thibault Moirez, Independent Analyst